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The Honolulu rail authority has finally awarded the long-awaited contract to design and build three miles of elevated rail line and six stations through the city’s urban core from Middle Street to the Civic Center station near South Street.

The $1.66 billion proposal by the Los Angeles-based Tutor Perini Corp. should resolve years of uncertainty surrounding the last leg — at least for now — of the 18.9-mile rail line from East Kapolei to Kakaako. Construction is scheduled to be completed in 2030.

was the only bidder, and the company’s $1.66 billion proposal will cost $300 million more than the Honolulu Authority for Rapid Transportation had budgeted in its 2022 recovery plan, according to HART CEO Lori Kahikina.

But Kahikina said Thursday rail officials are confident the rail authority can find the money to cover the difference. That can be done by dipping into contingency funding that is being held in reserve for unexpected costs, or by finding cost savings in other contracts, she said.

The extra cost may cause HART to increase its total estimated cost of construction, but HART needs to discuss that possibility with the Federal Transit Administration first, she said.

The rail authority solicited bids to build the guideway and stations through the city center to Ala Moana twice before, but even before any contractors were able to submit proposals.

The second attempt to award the city center project was structured as a public-private partnership, but that effort failed in 2020 because the proposals from contractors came in vastly over budget. Tutor Perini participated in that round of bidding, and submitted a proposal for more than $2 billion.

The city then decided two years ago to shorten the rail line by ending it in Kakaako as a way to cut costs, which eliminated the need for two stations and more than a mile of guideway.

That led to the solicitation for the design-build contract that was awarded Thursday, with the contract to be executed in mid-September. Design work will begin immediately after contract execution, and construction is expected to start in the second half of 2025, according to HART.

Ending the rail line at South Street will reduce the overall projected ridership for the system by about 30% from the original 2012 projections, and Kahikina and HART board members have said they still want to find a way to reach Ala Moana.

To that end, the most recent city center solicitation included an option for bidders to extend the system from South Street to Ala Moana Center, but that is not in the cards at the moment. The $1.66 billion award does not include the optional add-on to Ala Moana, Kahikina said.

Tutor Perini offered a base price of $325 million to extend the system to Ala Moana, but Kahikina said the city is not accepting that add-on proposal at this time.

“At this point we’re not looking at Ala Moana just yet. We want to get all of our finances in check first,” she said. She followed up later with a written statement that said the Ala Moana proposal “requires additional negotiation” before it can be awarded and executed.

The city pre-qualified two entities last year to bid on the city center portion of the project, but a conglomerate called City Center Builders JV later dropped out, Kahikina said. That joint venture included the local company . and .

Tutor Perini has already been advertising in Honolulu for local contractors who want to participate in the project, she said.

Tutor Perini Corp. Chairman and Chief Executive Officer Ronald Tutor said in a written statement that “Tutor Perini is proud and excited to be a part of this transformational project in Honolulu.”

“We look forward to partnering with HART to see this project through to its successful conclusion,” Tutor said.

The city center contract award is also expected to unlock $250 million in federal funding that the Federal Transit Administration pledged for the Honolulu rail project more than a decade ago. The FTA has been withholding that money until the city was able to award the city center contract at an affordable price.

“This is a huge milestone,” Kahikina said. The City Center Guideway and Stations contract is the largest single construction contract of the entire project, and the effort to award it began about 18 months ago, she said.

The company has a good deal of flexibility in how it designs and builds the city center segment of rail within perimeters set by HART, Kahikina said.

For example, that means the stations may not look like the already completed stations, or elements such as the overhead shade canopies may have a different look, she said.

“They have some criteria they have to meet, but other than that they’re free to come up with their own designs,” Kahikina said.

That flexibility even includes where Tutor Perini will start construction, and exactly where it will build the guideway support columns.

Extensive utility relocation work is still underway in the Dillingham Avenue corridor, so it may make more sense for the contractor to begin building the guideway and stations in Kakaako and work west from there, she said.

Another strategy HART used to try to contain costs is the rail authority agreed to share some of the risk of inflation rather than requiring the contractor to own all of that risk, Kahikina said.

For example, if the cost of concrete or steel dramatically increases, HART may be required to chip in to help cover that expense, she said.

The Honolulu rail project will be paid off when it is finally complete, which is “really unusual” for such a large infrastructure project, she said.